UNIFIED ACCOUNTS CODE STRUCTURE

1. UNIFIED ACCOUNTS CODE STRUCTURE A Presentation to the Government Association of Certified Public Accountants (GACPA) by: Luz M. Cantor Assistant Secretary, DBM October 17, 2013 The Oriental Hotel, Taysan Hill Sto. Niño Village, Legaspi City

2. Outline PART 1. The PFM Reform Roadmap and UACS • Background of PFM • PFM Cycle and Gaps • PM Reform Roadmap • Executive Order No. 55 • Deliverables • Unified Account Code Structures (UACS) • What is UACS? • Why a UACS? • Where will UACS be used? • Coverage of UACS PART 2. UACS Structure or Key Elements • Funding Source Code • Organization Code • Location Code • MFO/PAP Code • Object Code PART 3. Code Administration

3. Part IThe PFM Reform Roadmap and the UACS

4. PFM Cycle and Gaps PREPARATION AUTHORIZATION ACCOUNTABILITY lack of budget credibility budget not results-based lack of funding predictability EXECUTION weak budget oversight by Congress and the public weak cash management system no common budgetary and accounting classification weak monitoring of contingent liabilities

5. Financial Reporting NOW The Philippine PFM needs this kind of information system

6. UACS and PFM Policy Basis • Master plan for modernizing the financial management system of the government • Executive Order 55 (s. 2011) directs the integration and automation of PFM systems • Improve efficiency, accountability and transparency of public fund use • Contribute to good governance and fiscal discipline as a strategy for inclusive growth and poverty reduction

7. Deliverables required under EO 55 • Real time online accounting • Monitoring and control of obligations and disbursements • Regular in-year reporting of budget execution • Timely year-end audit reporting of agency financial and physical operations • Comprehensive, timely, accurate and consolidated PFM System

8. What is UACS? a government-wide harmonized budgetary, treasury and accounting code classification framework to facilitate reporting of all financial transactions of agencies

9. Why a UACS? • Directed at harmonizing budgetary and accounting classifications and structures for simplifying and consolidating formats for financial reports • Enable reporting of actual revenues and actual expenditures compared to what was projected to be collected and expended in the budget • Enable the comparison of disbursements for programs/projects/activities with their approved appropriationsSource: PFM Reform Roadmap

10. Where will UACS be used? Every IT system should adopt the UACS for: • Budget cycle - Preparation, Legislation, Execution and Accountability • Reporting Appropriation, Allotment, Obligation, Disbursement • Enabling reporting of actual expenditure against budget appropriation as envisaged in PFM roadmap • Payroll, budget, cash management, budget execution and forward planning • Performance measurement – performance indicators linked to UACS MFOs and outcomes achieved reported against budget and targets

11. UACS Coverage All NGAs including Constitutional Commissions/Offices, SUCs and GOCCs receiving Budgetary Support from NG, including those maintaining special accounts in the general fund

12. Part IIUACS Structure

13. UACS Structure

14. Funding Source Segments

15. Funding Source: Financing

16. Funding Source: Authorization

17. Funding Source: Fund Category

18. Combined Funding Source Code

19. Business Rules to Facilitate Data Integrity: Fund Source Code • Requires users to identify source of funds in the case of foreign assisted projects i.e. which country or multilateral agency provided financing for the project? • Requires users to identify type of funds being given to GOCCs in the case of budgetary support i.e. Is it equity, subsidy or net lending?

20. UACS Structure

21. Organization Code Segments

22. Organization Code Segments

23. Department Code

24. Agency Code

25. Examples of Operating Units Classification

26. Lower-Level Operating Unit

27. Organization Code Segments • Department – an executive department created by law; includes any instrumentality having or assigned the rank of a department, regardless of its name or designation. (e.g. DepEd ) • Agency – refers to various units of the Government, including bureau, office, instrumentality or GOCC. (e.g. DepEd – Office of the Secretary) • Operating Unit – refers to entities charged with carrying out specific substantive functions or with directly implementing programs/projects of a department or agency, such as regional offices, line bureaus and field units.

28. Organization Code Segments EXAMPLE:

29. UACS Structure

30. Location Code Segments

31. Location Code

32. Location Code Segments

33. Region Code 33

34. Province Code

35. Municipality Code

36. UACS Structure

37. MFO/PAP Code Segments

38. PAP Category

39. Project Category

40. Project Sub-Category

41. Example of MFO/PAP Coding

42. Example of MFO/PAP Coding

43. Example of MFO/PAP Coding DEPARTMENT OF BUDGET AND MANAGEMENT: Office of the Secretary CONTINUED

44. Example of MFO/PAP Coding DEPARTMENT OF BUDGET AND MANAGEMENT: Office of the Secretary CONTINUED

45. UACS Structure

46. Object Code Segments

47. COA Revised Chart of Accounts (RCA) Has been substantially revised to consolidate some line items, add clarity to overall structure and to facilitate compliance with International Public Sector Accounting Standards Moved away from the 2003 3-digit coding framework to a 2012 8-digit framework 47

48. Object Code Every item on the COA’s Revised Chart of Accounts included Sub-Object codes added to meet DBM, BTr, DoF & COA reporting requirements Capital Outlay codes added in correspondence with relevant COA’s Revised Chart of Accounts Asset Codes Some Lump-Sum Codes added for use prior to transfer to Departments

49. Object Code Framework • Every item on the COA Revised Chart of Accounts included • Sub codes COA added to meet DBM, BTr, DoF and COA reporting requirements • Capital Outlay codes added corresponding with relevant COA Revised Chart of Account asset codes

50. Starting Point – COA’s Revised Chart of Accounts